NEW YORK: U.S. stock futures tumbled early Friday and a sell-off spread across Asian markets after American forces carried out a sixth consecutive night of strikes against Iran, deepening a standoff that has rattled investors already unsettled by a slide in semiconductor stocks.
Dow Jones Industrial Average futures fell 420 points, or 0.8%. S&P 500 futures lost 0.9%, and Nasdaq-100 futures dropped 1.6% as technology shares drew fresh scrutiny.
U.S. Central Command said overnight that it had struck dozens of military targets in Iran, including logistics infrastructure and maritime capabilities.
The escalation has unraveled a fragile truce reached last month and renewed disruptions to energy flows through the Strait of Hormuz, a waterway that typically carries about 20% of the world’s oil traffic, according to reports.
Asian markets slide
The turmoil hit markets across the Asia-Pacific region Friday. Japan’s Nikkei 225 and the broader Topix index both opened lower before extending their declines as the session progressed. Hong Kong’s Hang Seng index and mainland China’s CSI 300 also fell, while Australia’s S&P/ASX 200 slipped. South Korean markets were closed for a public holiday.
In Hong Kong, shares of Tencent, Meituan, Kuaishou, Baidu and Alibaba all declined.
Chip stocks extend losses
The overnight losses followed a rough Thursday session on Wall Street, where a decline in chipmakers dragged down the broader market. The S&P 500 shed 0.5%, the Nasdaq Composite dropped 1.5%, and the Dow closed 105.67 points lower, or 0.2%.
The VanEck Semiconductor ETF slid nearly 4% after Taiwan Semiconductor Manufacturing Co. fell more than 2% following a mixed second-quarter report. Although the chipmaker’s profit surged from a year earlier, it also raised its full-year spending outlook, a move that weighed on the stock. Marvell Technology, STMicroelectronics and Micron followed Taiwan Semiconductor lower. TSMC shares fell further in Asian trading Friday.
Thursday’s decline left the semiconductor ETF down 6.9% for the week, putting it on pace for its third weekly loss in four weeks. The S&P 500, Dow and Nasdaq were also lower for the week, off 0.6%, 0.2% and 1.5%, respectively.
The sell-off spread to Asian chip and technology stocks Friday. SoftBank Group shares dropped 9.2%, chip equipment maker Tokyo Electron lost 9%, and Advantest slid 9.4%, tracking the overnight losses on Wall Street.
Japanese memory chipmaker Kioxia plunged more than 14% after a federal jury in Texas ordered the company Thursday to pay $229 million in damages for infringing a Viasat patent related to computer memory technology. Shares of South Korea’s SK Hynix had closed more than 11% lower Thursday, ahead of the holiday closure.
Market outlook
Despite the recent turbulence in artificial intelligence-related stocks, the S&P 500 remained about 1% below the record high it set in early June.
Ed Clissold, chief U.S. strategist at Ned Davis Research, said the market’s resilience so far suggests it is not near a major peak. “The fact that the market hasn’t fallen apart tells me that this likely not a major bull peak,” Clissold told CNBC’s “Closing Bell.”
Clissold said the economy could slow modestly in the near term but that a recession remains unlikely, adding that a period of consolidation could help ease froth that has built up in certain sectors of the market.
Seven & i eyes European expansion
Away from the sell-off, shares of Seven & i Holdings Co. gained more than 3% Friday after Japan’s Nikkei newspaper reported that the 7-Eleven parent company was nearing a deal to acquire a stake in Zabka Group, a Polish convenience store chain. The deal is expected to be worth several hundred billion yen and would extend Seven & i’s overseas convenience store business into Eastern Europe, according to the report.
Zabka, founded in 1998, operates more than 10,000 franchise stores in Poland selling snacks and groceries. Shares of the company, which trades on the Warsaw Stock Exchange, closed 10.9% higher Thursday to reach a record high.
